Children's Advertising Review Unit Issues Compliance Warning for Child-Directed Advertising in Metaverse

In the U.S, BBB National Programs’ Children’s Advertising Review Unit (CARU) has issued a new compliance warning regarding the application of CARU’s Self-Regulatory Guidelines for Children’s Advertising to advertising practices directed to children in the metaverse.

CARU’s Advertising Guidelines are widely recognized industry standards designed to assure that advertising directed to children is not deceptive, unfair, or inappropriate for its intended audience.

CARU monitors child-directed media to ensure compliance with its Advertising Guidelines, seeking the voluntary cooperation of companies and, where necessary, referral for enforcement action to an appropriate federal regulatory body, usually the Federal Trade Commission (FTC), or to a state Attorney General.

In this compliance warning for the metaverse, CARU reminds advertisers that the Advertising Guidelines apply to all advertising, in any medium, directed to children under age 13, and that the Guidelines require that advertising be neither deceptive nor unfair to the children to whom it is directed, as these terms are applied under the FTC Act.

Mamie Kresses, vice president, CARU said:

“Our warning puts advertisers, brands, influencers and endorsers, developers, and others on notice that CARU’s Advertising Guidelines apply to advertising in the metaverse and that CARU will strictly enforce its Guidelines against metaverse advertising.”

In the metaverse, according to Kresses, advertisers should be particularly cautious in the following areas:

Avoid blurring advertising and non-advertising content

Today, advertising can be seamlessly woven into interactive gaming, entertainment, and educational content, along with the blending of influencer marketing and user-generated content, across increasingly connected spaces.

In metaverse spaces, the risk of blurring advertising and content is intensified. CARU’s Guidelines require that advertising must be easily identifiable as advertising.

On this issue, CARU will examine whether and how advertising is identified.

Influencer and endorser advertising must be clearly disclosed

In the metaverse, influencer marketing, including through avatar influencers that can interact directly with children to promote brands, creates potential confusion as to whether influencers are advertising or simply expressing their own preferences.

CARU makes it clear that both advertisers and their influencers are responsible for claims made and will be looking for clear and conspicuous disclosures identifying the material relationship between the influencer and advertiser.

Manipulative tactics in advertising are prohibited

The risk of manipulating children into unwittingly viewing ads or making purchases is heightened where advertising is interwoven into children’s content. Per CARU’s Advertising Guidelines, advertising directed to children cannot use manipulative tactics to induce children to view or interact with advertising or make in-game purchases.

In addition, CARU’s Guidelines also explicitly identify, and CARU will be on the lookout for, the use of other prohibited advertising practices that put undue social or emotional pressure on children.

Use clear and conspicuous disclosures

Not only does CARU require advertisers to avoid manipulation, blurring, and other deceptive advertising techniques, but CARU’s Guidelines require disclosures of material information to be clear and conspicuous.

This means disclosures must be understandable to the children in the intended audience, taking into account their limited vocabularies and level of language skills, and must be presented so that they are easily noticeable and prominent so children are likely to see and hear them.

In this compliance warning, CARU alerts industry to its enforcement priorities regarding advertising in the metaverse, as well as in augmented and virtual reality worlds.

Kresses encourages advertisers, developers, influencers and endorsers, and others to review CARU’s Advertising Guidelines to understand how to truthfully, transparently, and appropriately advertise to children in these and other media.